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Q. If a good is priced at Rs. 180 p.u. and its price is increased to Rs. 240 p.u. Now suppose quantity demanded previously was 100 units and as a result of price increase, the quantity demanded fell to 80 units. What is the price elasticity?
- a). 777
- b)1.4
- c)1
- d). 8
Correct answer is option 'A'. Can you explain this answer?
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Q. If a good is priced at Rs. 180 p.u. and its price is increased to R...
Price Elasticity of Demand Calculation
Price Elasticity of Demand (PED) is a measure of the responsiveness of quantity demanded to the change in price.
PED = (% Change in Quantity Demanded ÷ % Change in Price)
Given:
Initial Price (P1) = Rs. 180
New Price (P2) = Rs. 240
Initial Quantity Demanded (Q1) = 100 units
New Quantity Demanded (Q2) = 80 units
% Change in Quantity Demanded = ((Q2 - Q1) ÷ Q1) × 100
% Change in Quantity Demanded = ((80 - 100) ÷ 100) × 100
% Change in Quantity Demanded = -20%
% Change in Price = ((P2 - P1) ÷ P1) × 100
% Change in Price = ((240 - 180) ÷ 180) × 100
% Change in Price = 33.33%
PED = (% Change in Quantity Demanded ÷ % Change in Price)
PED = (-20% ÷ 33.33%)
PED = -0.6
Absolute Value of PED
The absolute value of PED is taken to represent the elasticity of demand.
|PED| = |-0.6|
|PED| = 0.6
Interpretation
The price elasticity of demand is greater than 1, which means that the good is elastic. A change in price leads to a proportionately larger change in quantity demanded. In this case, the absolute value of PED is 0.6. It means that a 1% increase in price leads to a 0.6% decrease in quantity demanded.
Price Elasticity of Demand (PED) is a measure of the responsiveness of quantity demanded to the change in price.
PED = (% Change in Quantity Demanded ÷ % Change in Price)
Given:
Initial Price (P1) = Rs. 180
New Price (P2) = Rs. 240
Initial Quantity Demanded (Q1) = 100 units
New Quantity Demanded (Q2) = 80 units
% Change in Quantity Demanded = ((Q2 - Q1) ÷ Q1) × 100
% Change in Quantity Demanded = ((80 - 100) ÷ 100) × 100
% Change in Quantity Demanded = -20%
% Change in Price = ((P2 - P1) ÷ P1) × 100
% Change in Price = ((240 - 180) ÷ 180) × 100
% Change in Price = 33.33%
PED = (% Change in Quantity Demanded ÷ % Change in Price)
PED = (-20% ÷ 33.33%)
PED = -0.6
Absolute Value of PED
The absolute value of PED is taken to represent the elasticity of demand.
|PED| = |-0.6|
|PED| = 0.6
Interpretation
The price elasticity of demand is greater than 1, which means that the good is elastic. A change in price leads to a proportionately larger change in quantity demanded. In this case, the absolute value of PED is 0.6. It means that a 1% increase in price leads to a 0.6% decrease in quantity demanded.
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Q. If a good is priced at Rs. 180 p.u. and its price is increased to R...
As we know that Arc. method
20by 60 multiplied with 420 by 180 to get 0.777
20by 60 multiplied with 420 by 180 to get 0.777
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Q. If a good is priced at Rs. 180 p.u. and its price is increased to Rs. 240 p.u. Now suppose quantity demanded previously was 100 units and as a result of price increase, the quantity demanded fell to 80 units. What is the price elasticity?a). 777b)1.4c)1d). 8Correct answer is option 'A'. Can you explain this answer?
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Q. If a good is priced at Rs. 180 p.u. and its price is increased to Rs. 240 p.u. Now suppose quantity demanded previously was 100 units and as a result of price increase, the quantity demanded fell to 80 units. What is the price elasticity?a). 777b)1.4c)1d). 8Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Q. If a good is priced at Rs. 180 p.u. and its price is increased to Rs. 240 p.u. Now suppose quantity demanded previously was 100 units and as a result of price increase, the quantity demanded fell to 80 units. What is the price elasticity?a). 777b)1.4c)1d). 8Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Q. If a good is priced at Rs. 180 p.u. and its price is increased to Rs. 240 p.u. Now suppose quantity demanded previously was 100 units and as a result of price increase, the quantity demanded fell to 80 units. What is the price elasticity?a). 777b)1.4c)1d). 8Correct answer is option 'A'. Can you explain this answer?.
Q. If a good is priced at Rs. 180 p.u. and its price is increased to Rs. 240 p.u. Now suppose quantity demanded previously was 100 units and as a result of price increase, the quantity demanded fell to 80 units. What is the price elasticity?a). 777b)1.4c)1d). 8Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Q. If a good is priced at Rs. 180 p.u. and its price is increased to Rs. 240 p.u. Now suppose quantity demanded previously was 100 units and as a result of price increase, the quantity demanded fell to 80 units. What is the price elasticity?a). 777b)1.4c)1d). 8Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Q. If a good is priced at Rs. 180 p.u. and its price is increased to Rs. 240 p.u. Now suppose quantity demanded previously was 100 units and as a result of price increase, the quantity demanded fell to 80 units. What is the price elasticity?a). 777b)1.4c)1d). 8Correct answer is option 'A'. Can you explain this answer?.
Solutions for Q. If a good is priced at Rs. 180 p.u. and its price is increased to Rs. 240 p.u. Now suppose quantity demanded previously was 100 units and as a result of price increase, the quantity demanded fell to 80 units. What is the price elasticity?a). 777b)1.4c)1d). 8Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
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Q. If a good is priced at Rs. 180 p.u. and its price is increased to Rs. 240 p.u. Now suppose quantity demanded previously was 100 units and as a result of price increase, the quantity demanded fell to 80 units. What is the price elasticity?a). 777b)1.4c)1d). 8Correct answer is option 'A'. Can you explain this answer?, a detailed solution for Q. If a good is priced at Rs. 180 p.u. and its price is increased to Rs. 240 p.u. Now suppose quantity demanded previously was 100 units and as a result of price increase, the quantity demanded fell to 80 units. What is the price elasticity?a). 777b)1.4c)1d). 8Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of Q. If a good is priced at Rs. 180 p.u. and its price is increased to Rs. 240 p.u. Now suppose quantity demanded previously was 100 units and as a result of price increase, the quantity demanded fell to 80 units. What is the price elasticity?a). 777b)1.4c)1d). 8Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
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